The Innovation of Destination Resort Casinos

When people used to think casinos, they thought of one business: the facility where all the gambling took place. Especially in cities like Las Vegas, Reno, or Atlantic City, casinos had one clear image to them of a business where there would be slot machines, poker tables, and other gambling games across the floor space. Some entertainment existed, such as comedy and lounge music acts, but the casino itself was focused on gambling.

What was missing from this equation were new revenue streams for casinos. All revenues came from gamblers and tourists who had a narrow desire to gamble. Adding into the mix habitual gamblers and a casino itself did not seem to offer any new forms of revenue besides gambling. This often lead to social criticisms of casinos as being detriments to communities. Customers around a casino would become relatively local or only be gambling-only tourists. This could lead to a drying of economic activity in a general area as hospitality and entertainment companies as well as local governments lost profits and tax-base revenues.

What changed was the advent of the destination resort casinos. Pioneered by a range of individuals, like Steve Wynn, older casinos in cities like Las Vegas began to be renovated and re-branded toward more upscale, affluent clientele and entertainment over gambling.

This re-branding created a new economic model for casinos called the destination resort casino. With the previous models, saturated markets, like Las Vegas, created a clientele between competing casinos that ranged from gambling-only tourists and local habitual gamblers. Various investors found that if the casinos offered more hospitality and entertainment services, profits for such business would diversify and could, in theory, come from other forms of entertainment besides gambling.

This spawned the destination resort casino; a casino where luxurious lodging is attached to the casino grounds and entertainment, ranging from musical concerts, comedy, sporting events, clubs, and a range of eateries and bars. Top musicians and comedians would become similar to visiting scholars, having various night-after-night performances to attract many different tourists from around the world. In addition, these resort casinos become a “destination”-location. This means that tourists from across the world learn about the unique brand of these casinos beyond their gambling facilities and travel to that casino. This helps to increase hospitality and entertainment economic activity within a local area, especially in areas where there is not a dense, competitive gambling market.

It was this insight, re-branding casinos as destination resorts for various forms of entertainment, that led to a renaissance in casino gaming. As long as a casino was centered on being a destination resort that offered amenities beyond gambling, the business would attract more people than just gambling-only tourists or local habitual gamblers. Families, professionals, and people who would want to eat at the casino’s restaurants, shop at unique stores, play at their arcades or amusement parks, watch top sporting events or concerts, or just getaway on a vacation would become the main revenue streams for these businesses. This helps to create more revenue that can be taxed, allowing local municipalities to gain, not lose, revenues from their casinos. In addition, the tourists activities in the local community would have net-positives, instead of net-losses, since new economic activity would flourish. Even with moral and social issues of problem gambling, when the majority of money comes from entertainment, the casino became an entertainment complex instead of a simple, gambling establishment.